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In the context of economy, Potential GDP refers to:
  • a)
    measure of country's economic output adjusted for the impact of inflation.
  • b)
    the level of output that an economy can produce at a constant inflation rate.
  • c)
    the market value of goods and services produced in an economy, unadjusted for inflation.
  • d)
    measure of country's economic output at Zero inflation.
Correct answer is option 'B'. Can you explain this answer?
Verified Answer
In the context of economy, Potential GDP refers to:a)measure of countr...
  • Like GDP, potential GDP represents the market value of goods and services, but rather than capturing the current objective state of a nation’s economic activity, potential GDP attempts to estimate the highest level of output an economy can sustain over a period of time. 
  • According to OECD’s Economic Outlook publication, Potential gross domestic product (GDP) is defined as the level of output that an economy can produce at a constant inflation rate. Hence option (b) is the correct answer.
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In the context of economy, Potential GDP refers to:a)measure of countrys economic output adjusted for the impact of inflation.b)the level of output that an economy can produce at a constant inflation rate.c)the market value of goods and services produced in an economy, unadjusted for inflation.d)measure of countrys economic output at Zero inflation.Correct answer is option 'B'. Can you explain this answer?
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In the context of economy, Potential GDP refers to:a)measure of countrys economic output adjusted for the impact of inflation.b)the level of output that an economy can produce at a constant inflation rate.c)the market value of goods and services produced in an economy, unadjusted for inflation.d)measure of countrys economic output at Zero inflation.Correct answer is option 'B'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about In the context of economy, Potential GDP refers to:a)measure of countrys economic output adjusted for the impact of inflation.b)the level of output that an economy can produce at a constant inflation rate.c)the market value of goods and services produced in an economy, unadjusted for inflation.d)measure of countrys economic output at Zero inflation.Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for In the context of economy, Potential GDP refers to:a)measure of countrys economic output adjusted for the impact of inflation.b)the level of output that an economy can produce at a constant inflation rate.c)the market value of goods and services produced in an economy, unadjusted for inflation.d)measure of countrys economic output at Zero inflation.Correct answer is option 'B'. Can you explain this answer?.
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